Full text of Central Western Banker : May 1934, Volume 29, No. 5

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Federal
Reserve Bank1 of St. Louis
J

CEN TR AL W ESTERN

BANKER
•

Omaha

The Fremont and Norfolk
Group Meetings
Page 4

Reach Out—and Bring Them In
Page 7

77Why A Service Charge77
Page 9

The Three Elements of
Farm Financing
Page 11

M ay

1934

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Federal Reserve Bank of St. Louis

BUILT ON A
CONSERVATIVE
BANKING POLICY
The First National Bank of
Omaha, which was nationalized
in 1863, seventy-one years ago,
has steadfastly held to its policy
of conservative banking. Our
constant adherence to such a pol
icy has gained and held the con
fidence of the people of this ter
ritory in our institution. The
faith and trust displayed by our
patrons are shown in the fact
that many have been our cus
tomers fo r twenty, thirty, and
forty years— some fo r more
than fifty years.

When you are in Omaha, please
make our bank your Omaha
headquarters.

RSTNational
BANK OF OMAHA

Central Western Banker, l\lay, 1934

C E N T R A L W E/T C C N

EA N EER

410 A R TH U R BUILDING
OMAHA
C l iff o r d D e P u y , Publisher

R. W. M oo rh ead , Associate Publisher

H. H. H a y n e s , Editor

F r a n k S. L e w i s , 218 Essex Bldg., Minneapolis

F r a n k P. S y m s , Vice-President, 19 West 44th Street, New York

Subscription, 25 cents per copy; $2.00 per year.

V olume 29

Entered as second-class matter at the Omaha postoffice.

MAY,

19 3 4

THE B U S IN E S S
B
By

N u m b er 5

OUTLOOK

LEONARD P. AYRES

U S IN E S S improvement has made
good progress during the first
quarter of this year.
Industrial
production has steadily expanded, em
ployment has increased, and pay rolls
have grown larger even more rapidly
than the number of workers has moved
up. T here have been steady advances
in the security markets.
Bond prices
have risen almost continuously. Early in
April the index of all bonds had reached
a new high for the year. High grade
bonds have been especially strong, and
by the end of the first week in April
the D o w Jones price index of 10 high
est grade rail bonds reached the highest
figures ever recorded since the index was
started in 1915. M any of the limited
indexes of stock prices have seemed to
reflect indecisive movements, but an in
dex of this bank which includes all stocks
traded rose early in April to a new
high for this year. In securities a gen
eral and sustained creeping advance has
been under way.

financial and b a n k i n g conditions

continue to d e v e lo p ........................

considerable

number of threaten

ing labor disputes have been settled,
and it now seems likely that we shall
escape any period of numerous and seri
ous strikes. T his is most encouraging,
but some of the accompanying develop
ments of recent labor compromises raise
problems that may prove difficult. Im
portant wage increases have been gen
erally granted in the three great indus
tries of iron and steel, coal, and auto
mobile manufacturing. In each case the
settlements were shortly follow ed by
sweeping advances in the prices of the
products.
Similar developments have
taken place in many smaller industries,
and it seems probable that important
price advances for many commodities
w ill shortly be announced. These may

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C ol.

Vice President,
The Cleveland Trust Company

operate to check demand and produc
tion, and they w ill complicate the diffi
culties of establishing desired price par
ities between agricultural products and
industrial goods.

our most difficult and
important problem continues to be
that of getting back to work the great
numbers of men and women who are
unemployed. It is always true in periods
of recovery follow ing depression that ine a n w h il e

"Th ere have been steady advances
in the security markets. Bond prices
have risen almost continuously . . .
. . . evidences of improvement in

unemployment can be cured by re
establishing financial and durable
goods production"
dustry expands its output far more rap
idly than it increases the numbers of its
workers. In the recovery from 1921 to
1923 factory production increased by
over 80 per cent while employment was
rising 32 per cent.

•
J ^ usiness has been improving steadily
and rapidly during the past five
months. T h e decline which began last
July continued to November. T hen the
present new advance began and carried
the volume of industrial production up

from nearly 34 per cent below normal
in November to less than 24 per cent
below in M arch, and the gains are con
tinuing in April.
JL vidences of improvement in finan
cial and banking conditions con
tinue to develop, and to demonstrate
that the turning of the corner in the
business depression involves the turning
of many minor corners.
•
r pH E au to m obile industry has con
stituted the bulwark of demand for
steel products, and has been chiefly re
sponsible for sustaining the operating
rate of the steel industry at a level just
under 50 per cent. T h e automobile in
dustry has also increased wages and
these increased costs along the line are
now beginning to be passed on to the
consumers in the form of higher prices
for automobiles. T h e automobile indus
try has been one in which moderate re
ductions in prices have historically un
covered large areas of demand, and thus
enabled the industry greatly to expand
its production. Clearly we are now en
tering a period in which the reverse
process will be tested out, and where
the enhanced costs engendered by the
new deal will have to be shouldered by
the consumers. T his is likely to be sig
nificant in the case of automobiles, for
people have discovered that the purchase
of new ones, unlike the purchase of food,
can be almost indefinitely postponed.
T h e industry would undoubtedly prove
vulnerable in the event of a buyers’
strike.

j^AST m o n t h ’ s bulletin showed that
there was no serious overproduction
of consumption goods in the prosperity
(Continued on Page 22)

Central Western Banker, M a y, 1934

The Fremont and Norfolk
Group Meetings
O R E than 100 members of
Group T w o of the Nebraska
Bankers Association held an un
usually fine convention last month, April
23rd, at Fremont. T h e meeting which
was presided over by P. J. Ternus, pres
ident, who is cashier of the Farmers
State Bank of Humphrey, and F. W .
Shonka Jr., as secretary, who is assistant
cashier of the Schuyler State Bank of
Schuyler, enjoyed a fine program, which
was opened by an address on “ W h at
Shall the Bank D o with Its M on ey” by
D r. John P. Begley of Creighton U ni
versity, and followed by Captain Donald
S. Leonard of the M ichigan State P o
lice, who emphasized the value of a state
police system.

A t the afternoon meeting, L . Oscar
Challman, general agent for the Farm
Credit Administration, spoke on “ T he
F C A Under the N ew D eal,” giving
facts and figures about the amounts
loaned in middle western territory, and
Nebraska in particular, and told of the
relief methods now being used.
H e was followed by the Hon. W . B.

E. E. Placek
President, First National Bank, W ahoo, and
president of the Nebraska Bankers Associa
tion. Mr. Placek addressed both the Norfolk
and Fremont meetings.

In the report of the Resolutions C om
mittee, stress was laid on recommending
the establishment of a statewide law en
forcement system as protection against
the underworld, this portion of the res
olution was as fo llo w s:
“ Nebraska is in T erritory No. 4 in
which banks must pay $20 per thousand
for the first $10,000, and $10 per thou
sand for each $1,000 insurance there
after for burglary and holdup insurance,
and as an agricultural state, suffering
enormous yearly losses due to stolen live
stock and property, has an economic sit
uation which places the farmer shoulder
to shoulder with his banker and inas
much as twelve eastern states enjoy low
insurance rates (N e w Y ork state at pres
ent is one-twentieth of Nebraska), due
to their state police systems, and our
county sheriffs are handicapped and hin
dered in the pursuit and capture of crim
inals by county lines which in effect are
legal barriers, therefore we recommend
(Continued on Page 14)

Banning, Nebraska state senator, who
spoke on tax problems.
J. M . Sorensen, of Fremont, chair
man of the Nebraska Bankers N R A
committee, made a report on the bankers
code and pleaded for the cooperation of
member banks in arriving at and sup
porting the code.
T h e afternoon meeting was concluded
by an interesting question box conducted
by W illiam Phillips, assistant cashier of
the Federal Reserve Bank of Omaha.
In an informal address at the morn
ing meeting, former Attorney General
C. E. Sorensen of Nebraska, was asked
to tell something of Nebraska’s law en
forcement situation with reference to
bank robberies. He contended that N e
braska is one of the easiest states of the
country in which to perpetrate bank ban
ditry, and spoke in favor of a state police
system.

A . G. Sam

President, Live Stock National Bank, Sioux
City, and president, Security State Bank, Nor
folk, was toastmaster at the banquet held in
Norfolk.

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D r. Begley, in his address, urged N e
braska bankers to invest money in their
own communities, saying they do not
have proper diversified loans.

J. F. M cD ermott
Vice president of the First National Bank o f
of Omaha, was the principal speaker at the
Fremont banquet on “ Money and Inflation . ,r

Central Western Banker, M a y, 1934

Restoring the Purchasing Power
of the

Dairy Fa rmer
By CHESTER C. DAVIS
Administrator,
Agricultural Adjustment Act

More than one-fourth of the entire gross income
in the United States is attributed to dairy cows.

H E Agricultural Adjustment A d
ministration has submitted to the
dairy farmers of America an ad
justment program for the dairy indus
try. T h e program is in the nature of an
offer which, should it be accepted, would
be the seventh put into effect under the
Agricultural Adjustment A ct. Dairy
products are the only basic commodity
listed in the A ct as passed which have
not been covered by an adjustment pro
gram already under way.

Before describing the details of this
program, I wish to tell you the story of
milk as I know it and to sketch the con
ditions in the industry which caused this
program to be devised. F or years the
dairy industry enjoyed comparative pros
perity in this country. Under the im
petus of fair prices, aided by tariff pro
tection, and helped by growing purchas
ing power of consumers in the cities,
production of dairy products grew stead
ily. T h e annual production of milk in
creased from 87 billions pounds in 1924
to nearly 102 billion bounds in 1932.
T h e increase from 1930 to 1932 alone
was 2 billion pounds.
W ith the growing understanding of
the great nutritive values of dairy prod
ucts and an increasing ability to buy, the
American consumer used greater and
greater quantities. Production of milk
per capita increased from 768 pounds in
1924 to 812 pounds in 1932.
W hen the depression came, the pur
chasing power of the American consum

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er declined drastically. But the cow pop
ulation did not decline. It has gone on
increasing in accordance with a twelveyear cycle until it has now reached a
total of more than 26 million cows, the
highest on record.
Under the double influence of the col
lapse of consumer purchasing power and
the growth in milk production, the dairy
industry in the last two years has under
gone the severest kind of punishment.
Prices of dairy products have fallen
until the index of dairy prices for 1933
was 69 compared to 140 in 1928. T h e
total cash income of dairy producers de
clined from 1,847 million dollars in
1929 to 985 million dollars in 1932, al
most half.
N ow , I hope that you will appreciate
the magnitude of such a calamity, not
only to the men who milk the cows, but
to the whole country.
Establish a lialancc

D uring the past several months the
Adjustment Administration has can
vassed the suggestions submitted by the
dairy industry. These have been anal
yzed by the score. T hey have been sift
ed carefully and the best elements of the
numerous proposals have been selected,
studied and developed.
T h e underlying fact to be faced now
is that when consumer purchasing pow
er is down and production is at or near
the peak, prices can not he maintained
at levels which are fair to dairymen.
T h e method of improvement afforded

by the Agricultural Adjustment A ct is
clear. T h e policy defined in the A ct
is to establish and maintain such a bal
ance between production and consump
tion as w ill reestablish farm buying
power. T h e volume of consumption is
dependent upon factors which are be
yond our control, such as factory pay
rolls and employment in the cities.
Therefore, pending improvement in
these factors, it seems evident that farm
ers must place some check upon produc
tion if they are to restore a balance of
supply with effective demand.
N ow let me make one point clear.
W e are not suggesting that dairymen
curtail production of milk because we
like the idea. W e would like to see this
nation consume much more milk and
butter than it is now consuming and at
a fair price to the farmer. W e have
studied every alternative plan that has
been proposed.
One popular suggestion coming from
outside the Administration is that re
striction be confined to the culling of
low producer cows.
But we find on
analysis that normally four to four and
one-half million cows are culled from
herds in a year by the farmers. T o rely
entirely on a culling campaign might
mean merely Government buying of
cows which otherwise would be elimin
ated by the farmers themselves with no
real effect on production. In fact, to
secure any effective degree of production
control by this method might require ac
quisition of perhaps 2,000,000 cows in
addition to normal culling. T h e prob
lem of Government disposal of the num
ber of carcasses without complete ruin
to the beef market would be involved.
The Program

I have outlined the dairy problem,
some of the suggestions made to us for
solution, and the reasons we thought

Central Western Banker, M a y, 1934

these alone insufficient. Bear in mind
the underlying fact that the cow popu
lation is higher than ever, and still grow
ing. A ll the 26 million producing units
are on the farms. T h e flush season of
production is ahead, and with spring
comes the possibility that good pastures
will increase the dairy output. So we
have to face the prospect of a flood of
milk which might beat down dairy
prices.
T h e program we are now submitting
to the dairy farmers for their considera
tion is designed to hold dairy production
at or near the seasonally low levels of
recent months. T h e plan provides ben
efit payments to farmers who agree to

cooperate. It would set aside at least 5
million dollars to finance relief distribu
tion of surplus milk to undernourished
children in cities. Five million dollars
more would be allocated to finance
transfer of healthy cows from surplus
dairy areas to needy farm families which
have no cows. These cows could not
be used for commercial milk production.
A fund of at least 5 million dollars
more would be established to finance a
speeding up of bovine tuberculosis erad
ication. This would launch what we
hope would be the beginning of a final
drive to complete the elimination of
that disease.
These additional supplementary fea-

36th Annual Statement, December 30, 1933

mBRYLOnD CASUALTY
c o m p a n y

♦

b o l t i

o r e

ASSETS
*Bonds and Stocks............................................
$21,056,692.46
Real Estate (Home Office Buildings)........................... 2,551,132.79
Real Estate (Philadelphia Office Buildings)...............
775,412.18
Real Estate (O th er)........................................................
203,758.96
Real Estate Mortgages...................................................
1,342,456.38
Collateral Loans .............................................................
280,687.15
Cash in Banks and Office................................................. 1,409,735.69
Interest Accrued .............................................................
83,275.09
Premiums in course o f collection (less than 90 days
due) ....................................................................... 3,664,977.37
Reinsured losses due from other Companies..............
686,054.74
Cash in suspended Banks recoverable under Deposi
tory losses paid.....................................................
420,176.39
Total Admitted Assets.................$32,474,359.20
*Valued in accordance with National Convention
Commissioners Security Valuations.

of Insurance

LIABILITIES
Premium R e se rv e .............................................................: : 8,108,402.16
Reserve for Federal, State and other taxes................
369,766.82
Reserve for unadjusted claims...................................... 14,357,114.79
Reserve for Commissions due on premiums in course
of collection (less than 90 days d u e )..............
697,563.10
Reserve for Sundry Accounts.......................................
24,741.04
Reserve for Real Estate Depreciation........................
634,139.37
Funds held under reinsurance treaties..........................
124,260.73
**Contingency Resf*r,re ....................................................... 1,402,344.05
* * *
{Preferred Stock $2,000,000.00
Capital.
(Common
“
500,000.00
Surplus
....................................... 4,256,027.14
SURPLUS TO POLICYHOLDERS............................

6,756,027.14
$32,474,359.20

**This reserve represents difference between values caried in assets for nonamortizable bonds and for all stocks and actual December 30, 1933, market
quotations on such bonds and stocks.
***The Preferred Stock represents one million shares issued at $7.50 per share
and redeemable at the option of the Company at the same price.
Although the sale of the First Convertible Preferred Stock had not been
consummated on December 30, it has since then been completed, and this
statement gives effect to that transaction.

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tures, combining the best elements of
suggestions which are outside of strict
production adjustment measures, can be
extended if Congress provides funds pro
posed in legislation now pending.
Individual Contracts

T h e main dairy production adjust
ment program would be based on con
tracts between individual producers and
Department of Agriculture.
Farmers
who sign contracts would be encouraged
to reduce production and would be as
sisted by the department in making their
own choice for the best paying methods,
but this w ill be eligible for benefit pay
ments if they agree to restrict sales. T his
curb would be utilized pending an in
crease in consumer purchasing power.
T h e effect of the proposed restriction
would be to put a check-rein on produc
tion at or about the level of the past
three months’ production. But this would
be a reduction below the high average
sale volume of 1932-1933 base period.
In addition to higher prices resulting
from balanced production, and besides
saving on feeding costs, cooperating
farmers would be paid benefit payments.
These benefits would be at the rate of
about 40 cents for each pound of butterfat which they reduce below their 193233 sales quota. O r they would be about
$1.50 on each 100 pounds of surplus
fluid milk which they reduce below their
1932-33 milk sales quota, within the
prescribed percentage limits. For indi
vidual farmers, these limits would be
10 to 20 per cent, with a 10 per cent av
erage reduction below the 1932-33 vol
ume as the general objective for the in
dustry.
T h e first benefit payment would be
made on the acceptance of the contract,
with a second payment after 6 months.
T h e processing tax would start when
the program goes into effect, at 1 cent
per pound on butterfat content, and un
der the plan proposed would be gradu
ally advanced to 5 cents per pound as
supply comes under control. T h e plan
calls for a compensatory tax on oleomar
garine.
Facilities for quick and refrigerated
transportation, and the ease of conver
sion into canned milk are among factors
which help to make such unrelated price
pegging impossible. T h e fluid milk price
must bear some sound relationship with
the butterfat price. Therefore to the
fluid milk producers we wish to say that
our efforts to help them get higher re
turns will be greatly strengthened if
(Continued on Page 22)

Central Western Banker, M a y, 1934

Reach Out—
A n d B ring Th em In
Today bankers have best opportunity in
years to build new and larger accounts—
if they go after them!
By D. R. WESSLING
President, Lytton Savings Bank
Lytto, Iowa

IT H
THE
inauguration of
President Roosevelt there came
a marked reversal of the former
government policy of fostering individ
ualism in business.
During M arch,
1933, and the months follow ing the
banking holidays, bankers were willing
to grab at straws in panic-stricken ef
forts to get back on a solid footing.
T hen came laws, codes, reorganizations,
deposit insurance— and bankers through
out the country heaved a sigh of relief.

There has been a great improvement
in the banking situation, but out of the
conditions which brought this improve
ment there is growing a dangerous ten
dency on the part of many bankers to
feel that the old individualism is gone,
that now there is little difference be
tween banks.
Consequently, a good
many bankers w ill be resting on their
oars, as far as any aggressive attempt
to secure business is concerned, thinking
that all banks are operating on a par
with their competitors.
A Little Resentful

But the public mind does not become
complacent about the banking situation
as quickly as bankers’ minds do. People
throughout the nation have had a re
sentful feeling toward banks and bank
ers in general. H owever, there is now,
on the surface, a more friendly attitude.
Regardless of the national changes that
have been put into effect, there cannot
help but continue to be that same resent
ful feeling — to some extent — that was
developed over a period of a few years.
W h at has been done naturally has had
a tendency to place the public in a more

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receptive frame of mind, and N O W , of
all times, the use of the right type of
publicity to build confidence and good
will and to secure business is vitally
important.
T here is no question about the differ
ence in the type of service being ren
dered by various banks. A ll one needs
to do is to visit banks in a number of
different localities (as I am continually
d oin g), or a dozen in the same locality,
stand in the lobby half an hour at each
place and observe the attitude of the
bank’s personnel while contacting their
customers.
T h e bank which is rendering a real
service to its community and planning
with patrons constructively certainly has
something more to offer them than the
bank which is drifting along on the as
sumption that all banks are on a par
and offering only routine services in a
perfunctory manner.
Banks Must Reach Out

Y ou have probably often heard the
statement that “ an institution is the
shadow of a man” — and so is a bank
the shadow of the men who make up its
personnel. T here is as much opportun
ity now to build up the personality of a
bank as ever before, and it is more essen
tial now that this be done. There is no
reason why people cannot be made to pa
tronize certain banks, just as they are
made to patronize certain stores.
Take clothing stores, for example.
T h ey all offer about the same classes of
merchandise. And yet, don’t you have a
preference, along with many other peo
ple, for some certain store? It may be

D . R. W essling
difficult for you to analyze that prefer
ence, but it was probably due, in the
beginning, to the fact that this store o f
fered attractive values in its advertising.
It carried brands of clothing that you
liked, and friendly clerks have succeed
ed in selling you on these brands, to
gether with the help of skillful, con
vincing national local advertising. Y ou
like the atmosphere of the store when
you go in, you like the way they treat
you — and you go back when you want
something else. Y ou get the habit of
going there, even though you could prob
ably buy merchandise just as good some
where else.
And that is what banks must do to
day: reach out beyond the field of their
present customers and bring in new
ones who will get the habit of patroniz
ing the bank regularly. By constructive
advertising through newspapers and di
rect mail the public can be made to
realize that there is as much difference
between two banks as between two
clothing stores.
Get the Habit

Claude C. Hopkins, one of the great
est advertising men this country has ever
known, illustrates a point in his book,
“ M y L ife in Advertising,” which is par
ticularly applicable to this subject of dif
ferences between banks. He says that
he was called in to handle the advertis
ing of the Van Camp company. Van
Camp’s pork and beans offered no unique
sales arguments, they were just like
other brands. A t a meeting in the fac-

Central Western Banker, M a y , 1934

8
tory half a dozen brands were served,
and not one of the men present could
decide which was Van Camp’s. T he
problem, then, was to tell facts which
had never been told, in order to make
Van Camp’s pork and beans stand out
above the others in the public mind.
Hopkins persuaded people to try Van
Camp’s pork and beans, though he made
no great claims of superiority — and
people got the habit of buying them.
T h e advertising campaigns were a great
success, as measured in actual sales in
creases.

mere statement of theory, for I know
from long and practical experience that
it can and is being done.

Banks can apply the same principle
Hopkins used so successfully. T h ey can
tell people about the services of their
banks, about planning with patrons,
about the safety of the institution, etc.,
in so many different and interesting ways
that the continued publicity is bound to
create a favorable impression and make
one bank stand out above the others in
the minds of the people to the extent
that they w ill get the habit of patroniz
ing that bank regularly. T his is not a

Continued,
progressive
advertising
serves a tw ofold purpose: it makes a
favorable impression on the public, and
it stimulates the bank’s own personnel
to keep on their toes and live up to the
service the advertising offers.
A ll of
which brings business.

Future Progress

T h e future progress of any bank is
going to depend to a large degree on the
manner in which the bank interprets its
services to the public. A man who lies
in bed for a long time finds it difficult
to walk when it becomes necessary for
him to attempt walking, while if he re
mains active, walking presents no dif
ficulties whatsoever.

T od a y we bankers have an opportun
ity to build new and larger accounts, the
best opportunity we have had in years.
Let’s make the best of it-— let’s not
rest on our oars.

Learning and Labor
A

L A R G E university in the M iddle
W est adopted on its inception the
maxim Learning and Labor. T hat motto
has become a definite part of the consci
ousness of the hundreds of thousands of
students who have labored in the uni
versity halls and emerged with learning.
Somehow, although it is seldom men
tioned— only seen here and there as an
inscription— every student on that cam
pus is keenly aware of the apothem. In
the back of his mind is the consciousness
that by the fruit of the labor and the
sweat of the brow of many generations
of farmers and artisans, this Delphi of
the prairies has become an oracle for
him. A nd sheer pride in such knowledge
makes him undertake his study with se
rious intent.
Through periods of storm and stress,
such as the period through which we
have recently passed, institutions of high
er learning invariably survive. Thus col
leges and universities are among our old
est surviving social institutions. A uni
versity will often outlive a nation or a
dynasty or an economic system.
T h e University of Heidelberg is near
ly ten times as old as the United G er
many created by Bismarck. T h e U ni

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By RICHARD W. HILL
Secretary, Americart Institute of Banking

versity of Salamanca is 300 times as old
as the Spanish Republic.
In our own country we have nearly
a dozen colleges older than the United
States which was born in 1789— H ar
vard, Yale, Princeton, W illiam and
M ary, W ashington and Lee, Rutgers,
Columbia, Salem, Transylvania.
W h ile institutions of higher learning
survive hardships, yet every economic
crisis leaves its mark on them. Crises
change men’s ways of thinking; and in
order to satisfy new intellectual desires,
subject matter must change, methods of
teaching must change.
Newton D . Baker told the Institute
of Pacific Relations at Banff that youth
must be trained with an eye on the ac
tual conditions of life. T h e American
Institute of Banking is doing just that.
It is training youth, and even middle
age, with an eye on actual economic con
ditions. N ow and always it has its fin
ger on the pulse of the banking world.
It is familiar with all phases of recent
banking legislation, and it is providing

much of that material in its textbooks
and pamphlets. N o other institution of
higher learning can act so quickly for its
constituents.
T o keep bankers informed is a colos
sal task. Banking has become so much
a profession that the banker of the fu
ture must have the temperament of the
scholar and the ability of the adminis
trator. In the world of the intellect,
every step counts for security. A hun
dred thousand men and women train
ing their minds to move freely and se
curely in the world of banking and fi
nance will approach eventual control
of the economic fate of man.

Resources Highest
Bankers T rust company, N ew York,
in its condensed statement of condition
as of M arch 31, 1934, shows total re
sources of $901,507,480, the highest in
the history of the company, as against
$737,202,420 at the end of last year.
Gross deposits have risen from $611,725,754 to $763,759,131 during the pe
riod. For the first time, the company
has segregated government from other
deposits; the former show an increase
of $111,879,331 and the latter $40,154,046 above the December figures.
Cash on hand due from banks and ex
changes for clearing house total $168,169,320 compared with $138,626,241.
United States government securities
come to $404,511,611 as against $242,478,352. Undivided profits show an in
crease of $580,165 after providing for
the usual quarterly dividend amounting
to $1,875,000 and now stand at $10,610,764.
Contingency fund at $15,556,626 has decreased by $293,267.
Capital and surplus fund remain un
changed.

A Legislated
Loss Policy
In 1933, 589 industrial corporations
showed net earnings of $391,600,000 as
against a deficit of $20,194,000 in 1932.
Fifty-five railroads reduced a 1932 de
ficit of $106,055,000 to $11,199,000.
T h e utility industry is suffering under
national and state policies of discrimin
ation and competition which do not ap
ply to other industry. Stockholders are
forced to accept losses legislated onto
them, such as inequitable class taxation
and tax financed tax exempt government
competition.

Central Western Banker, M a y, 1934

For years bankers had been educating the people to the
convenience of paying their bills by check, and were urging
them to start a checking account, no matter how sma II.

A n d th is

the people did, the theory being that some day big trees from little acorns
would grow-But the trees did not grow and the acorns still remained.

Within

the last decade, banks throughout the country have given away in free service an
amount equal to their entire capital!

/7W hy A Service Charge^
O

F A L L the changes that had been

made in banking reform in the
last ten to fifteen years, not one
had aroused as much ire amongst a
bank’s customers as the service charge.
Some of the reactions when the charge

was first put into effect ranged all the
way from purple speechless faces to tor

Excerpts from one of a series of
talks given before a group
of Minneapolis women

By MARION E. MATTSON
Northwestern National Bank
Minneapolis

rents of abusive language. However, it
is not my purpose to find amusement in
any anger that was aroused, but rather
to present to you why we feel a service
charge is justifiable. T h e American peo
ple as a class have always had the repu
tation of paying for what they get, but
naturally have an avers on to paying for
something for which they can’t see the
logic.
Operating Loss

For years individual checking accounts
represented the source of one of the
largest operating losses. Y ou all know,
of course, that a bank’s chief source of
revenue is the interest it obtains on the
money it loans and the notes it discounts.
D uring periods of normal prosperity
when earnings of commercial banks were
high, little or no attention was given to
the cost of checking operations. T h e
yield on bond accounts and other invest
ment returns was so profitable that it
covered up the operating losses. It was
only when the demand for borrowed
money decreased and the returns on in
vestments shrank or disappeared alto
gether and additional losses appeared
over and above what had been account
ed for on investments that bankers be
gan to sit up and take notice— in short,
to dig the nigger out of the woodpile.
Business firms are now more diligent

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than ever before in forestalling losses
and we believe banks should be en
titled to make a small service charge on
accounts that are carried at a loss to
them. W e all know that an unprofitable
bank is not a safe one and the service
charge helps to make any bank a safer
and stronger institution for its custom
ers. In short, the security of a bank
depends on its profitable operation. I
am sure that we are all broad-minded
enough to want our bank to operate
safely and to make a fair return on its
business. Banks are in business to make
a profit just as well as any other corpor
ation, partnership or individual. Take
ourselves, for instance, if we continually
live beyond our income in trying to keep
up with the Joneses, we soon find our
selves in a predicament.
Routine Services

It might be well to mention what
some of the routine services are in con
nection with all checking accounts. T he
bank receives from the depositor cash,
checks, drafts and other bills of exchange
which come to him as salary, wages, fees,
income, etc. It collects these items from
the banks on which they are drawn re
gardless of where they are located, and
brings the money back to the depositor’s
own bank. In the meantime, the depos-

itor receives immediate credit in most
instances. It disburses this money to ex
actly the right individuals and concerns
and in the exact amounts as directed by
the depositor, as evidenced by the checks
he draws. It renders to him each month
an accurate statement covering each and
every transaction. It furnishes him free
ly with deposit slips, pass books, check
books, and other supplies. Naturally all
this costs the bank money. T h e bank, by
acting as our paymaster and fiscal agent
saves us labor, risk and running around.
It saves us labor by doing all the things
I have just mentioned. It saves us tak
ing risk because it safeguards our money
and our cancelled checks make satisfac
tory receipts. It saves us running around
to pay our bills because all we have to
do is write our checks and mail them in
payment of same. Certainly our time
is worth something and shoe leather and
gasoline are expensive items these days.
A good many of us are penny wise and
pound foolish.
Prior to the time the present schedule
of charges was put into effect, the clear
ing house carried on a series of investi
gations to disclose what the minimum
size of an account must be in order to
permit the bank to carry it without loss
and without detriment to the character
of its service or to the standards of its
loaning and investment policy. As a re
sult, the clearing house found that no
bank in this city could carry an active
checking account properly unless there
was an average daily balance of at least
$300.00. W e had the choice of asking
our depositors with smaller balances to
either withdraw them, pay a moderate
fee for carrying them without loss or to
increase their balances.

Central Western Banker, M a y, 1934
An Illustration

Here is an account that had an aver
age balance for the month of January of
$464.00. Against this balance, the bank
has to carry a legal reserve of 10 per
cent or $46.00. This leaves a loanable
balance of $418.00, in other words, the
amount which the bank can put out on
interest. N ow for the actual cost in
volved in carrying this account. T he
general overhead amounts to $1.00 per

$1,000.00 or $0.46. T his lady wrote
74 checks during the month which ac
tually cost us 2J-2C per check, or $1.85.
T here were 3 deposits made at a cost
of 7c per deposit, making a total cost of
$2.52. T h e most that the bank could
earn on the loanable balance at the pre
vailing rate of interest, 4 per cent, would
be $1.44. This gain, less the total cost
of the account shows a loss of $1.08.
N ow for a little more detailed ex

Guaranty Trust Company
of New Y ork
140 Broadway
Fifth Avenue at 44th St.
LONDON

PARIS

BRUSSELS

Madison Avenue at 60th St.
LIVERPOOL

H AVRE

ANTW ERP

CO ND EN SED ST A T E M E N T , M ARCH 31, 1934

RESOURCES
Cash on Hand, in Federal Reserv e Bank,
and due from Banks and Bankers............................... $
Bullion in Foreign Branches.....................................................
U. S. Government Securities.....................................................
Notes of Reconstruction Finance Corporation..................
Public Securities ................................................
Stock of the FederalReserve Bank.......................................
Other Securities ..........................................................................
Loans and Bills Purchased.......................................................
Real Estate Bonds and Mortgages.........................................
Items in Transit with Foreign Branches.............................
Credits Granted on Acceptances.............................................
Bank Buildings ............................................................................
Other Real Estate.........................................................................
Accrued Interest and Accounts Receivable.......................

214,384,072.47
2,003,821.00
484,829,280.50
20,000,000.00
02,174,083.70
8,400,000.00
21,740,074.22
028,491,774.80
2,382,413.09
530.80
53,008,743.20
14,008,778.92
115,198.42
17,434,820.10

$1,528,975,103.40

L IAB IL IT IES
Capital .............................................................$ 90,000,000.00
Surplus Fund ............................................... 170,000,000.00
Undivided Profits .........................................
7,600,072.81
$
Capital Note (Payable on or before July 31, 1934) . . . .
Accrued Interest, Miscellaneous Accounts Payable,
Reserve for Taxes, etc......................................................
Acceptances ...................................................$110,065,467.30
Less : Own Acceptances
Held for Investment...........................
03,050,724.04
Liability as Endorser on Acceptances and Foreign Bills
Agreements to Repurchase Securities Sold.........................
Deposits ........................................................$1,157,667,279.18
Outstanding Checks ...............................
21,077,711.22

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Federal Reserve Bank of St. Louis

267,000,072.81
20,000,000.00
8,423,632.99
53,008,743.20
874,064.00
203,600.00

1,178,744,990.40
$1,528,975,103.46

planation of this analysis and how these
figures are arrived at. T h e average bal
ance is obtained by taking the book bal
ance at the close of each day’s business
for one month and dividing it by 30 to
get the average daily balance. Just what
is included in the general overhead, you
ask? This expense consists of those basic
costs which are necessary for the bank
to function as a going concern in main
taining its prestige in the community, the
confidence of its depositors, the creation
of new business, proper contact with the
business world and economic conditions
and other activities within the bank
which are necessary for it to begin and
continue in business. Such charges can
not be allocated to any particular class
of items. T h ey are, therefore, assumed
proportionately by every dollar that
tends to make up the structure of the
bank and referred to as the bank’s funds
and include deposits, circulation, re
serves, capital, surplus, etc. Under these
general headings come such items as
rent, heat, light, water, janitors’ sal
aries and supplies, taxes, depreciation,
insurance, legal
advice, advertising,
guards, etc.
H o w is the 2 /
l >c per check and the 7c
per deposit arrived at? T h e total cost
of running the bookkeeping department
enters into this — salaries, stationery,
postage, telephone, supplies, telautograph
service, etc., 7/8 of the tellers’ time is
charged up against this cost,
of the
time o f the filing department is devoted
to work in connection with checks and
deposits.
of the stenographic work
done in the bank bears relation to this
cost as does
of the time of the audit
ing department, and so on.
Total Cost

These amounts in themselves are tri
vial, but when you take into considera
tion that the bank last year handled 893,096 deposits alone, the total cost mounts
in a hurry. D uring the year 1933, 5,801,258 checks were written by cus
tomers of this bank. A dd to this the
cost of clearing items at lc and out-oftown items at J5c, we get a total cost
of close to $350,000.
Please do not think that we don’t wel
come small satisfactory accounts. Such
is not the case; all we ask is a fair com
pensation for the service rendered. W e
w ouldn’t think of having a telephone
installed in our home or subscribe to a
magazine without paying for same. Ser
vice has been and always w ill be the
keynote of good banking.

Central Western Banker, M a y , 1934

"Every case must be decided on its merits.

It is the

desire of all large investors and of the governmental agencies
that as far as possible owners of farms be permitted to retain those
farms, with as little distress to other elements as can possibly be arranged"

The Three Elements
O f Farm F inancing
By F. C. WAPLES
President,
The Midland Mortgage Company
Cedar Rapids, Iowa

H E M A K I N G of loans with real
estate as security goes back into
antiquity farther than any other
type of investment that we know of. It
has witnessed the rise and fall of na
tions; the rise and fall of economic and
social systems.
Just at present it is
emerging from this evolutionary and
revolutionary depression period and is
coming back into demand by conserva
tive investors as one of the available safe
places to invest. In the past six months
in the midwest, the situation has begun
to clarify and a very marked change has
been noted in the morale of those com
munities.

In the making of farm loans, the man
who contacted the borrower has been
one of the most important parts of the
system, and the future of the farm mort
gage as an investment will continue to
be dependent upon that very vital link
in the chain of such operations.
In the past twelve months, we have
seen a reversal from the hopeless feeling

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Federal Reserve Bank of St. Louis

of so many borrowers that there was
absolutely no chance of them ever saving
their farms, to the hopeful attitude that
we were now on the upgrade. W e have
witnessed a very large percentage of our
delinquent borrowers, through corn
loans and increased prices, demonstrate
their ability to put behind them their de
linquent interest and taxes and in many
cases to even repossess farms which they
had felt were lost either through fore
closure or through deeding away.
It
has given back to the man working con
stantly with these people a new inspira
tion that he is beginning to work with
some definite purpose.
Land Bank Refinancing

Three very large movements have aid
ed in this rehabilitation of agricultural
credit. T h e first one of these that began
to be felt was the refinancing of farms
by the Federal Land Bank and the
Farm Loan Commissioner. It has made
possible a means whereby debtors have
been able to form a composition of their

F. C. W aples
debts under one source and be relieved
o f pressing delinquencies that seemed unsurmountable. T h e insurance companies
are endeavoring to cooperate in these re
financing methods. M r. Anderson of the
Department of Agriculture spoke re
cently about the conciliation committees
that are being formed. H e made it very
ities of the nited States government are
clear that it was not the desire of any of
the governmental agencies, nor was it to
be a function of the conciliation commit
tees that they must demand that any
creditor reduce his indebtedness or ac
cept a discount on the same; that funds
had been made available through the
Federal Land Bank and Commissioner’s
Loans whereby they could offer to a
debtor as large a loan as they felt con
sistent under present conditions, and

Central Western Banker, M a y, 1934

that, if the various creditors deemed it
wise and cared to accept the amounts
that were offered, that it was absolutely
a voluntary matter on their part; but
that if any of the creditors or their first
mortgage creditor did not feel that he
cared to consider the amount available,
that it was not the duty of the concilation committee to demand that he must
take a cut. H e emphasized the fact that
there were other methods of settlement,
most of which have been followed for a
number of years by the insurance com
panies. T hey could either take the deed
and rent the farm back and give a re
purchase option to the borrower, where
by the first mortgage holder would be
protected on the income, or whereby that
indebtedness was protected by an as
signment of the rents or a right of pos
session which, as M r. Anderson ex
pressed, was freezing up the process
whereby the other creditors would have
to necessarily await the outcome o f bet
ter prices in order for them to recover.

linquencies but are paying their interest
ahead from thirty days to six or eight
months. M any principal payments on
loans have been made from such corn
loans, and it has stimulated the sale of
farm land. T h e details in connection
with making these corn loans, signing
waivers, and handling these papers have
very vastly increased the work of the
field men and the office forces of inves
tors during the past few months.
Corn-Hog Program

T he third arrangement that has en
tered into the situation is the corn-hog
reduction program. T h e effects of the
bonus payments w ill be felt sometime
during this spring and summer. T h e
anticipation of those payments and the
usage of the same by delinquent borrow
ers has already indicated that the aid
that is being given in that respect is go
ing to have a marked effect on the re
duction o f delinquencies. T h e govern
ment purposely made it impossible for
any creditor to obtain an assignment of
the bonus payments in connection with
this plan. I believe this was well and
wisely thought out, because it might be
very easy for the purpose for which the
bonus was originated to be defeated by
the active demand of creditors that it
immediately be applied on their own
particular debt.
As you know in your experience with
the corn loans, the average farmer and
borrower is extremely anxious to pay
up his delinquencies and has very w ill

Corn Loans

T h e second element that has entered
in during the past year has been the sys
tem of corn loans permitted by the C om
modity Credit Corporation. This has
undoubtedly had more widespread effect
on decreasing delinquencies and bringing
hope and courage back into the average
farmer’s heart than any one other thing
that has been done. It has brought into
Iowa better than fifty million dollars.
M any farmers not only paid up their de

G M A C SH ORT TER M H O TES

available in limited amounts
upon request

G
A

e n e r a l

c c e p t a n c e

Executive Office ~ B r o a d w a y at 57 t h

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Federal Reserve Bank of St. Louis

OFFICES

o t o r s

o r p o r a t io n
St r e e t

PRINCIPAL

" H ew Tor\. H- Y.
CITIES

ingly applied anything he received from
the corn loans toward such reductions.
Outside of the very tedious and diffi
cult work which has been thrust upon us
in connection with the corn-hog reduc
tion program, the figuring out of the
acreage that must be taken out of pro
duction and the usage of that acreage,
a much more difficult problem can be
solved by the settlement in the next few
months and in his contact with these
borrowers. In many cases this borrow
er needs encouragement and guidance to
show him that through this reduction
program, if he w ill properly use the
bonus toward reducing all of his indebt
edness in a wise and careful manner so
that it puts his loan in shape to avoid
foreclosure, that he will be able to go
forward and to retain the farm. It is
going to be a time of much additional
work, and if you will take his delinquent
cases and go over these matters with the
borrower at this time, figuring out the
borrower’s position, what he is going to
be able to receive in the way of cash
bonuses, and take into consideration his
other indebtedness, it would seem that
a satisfactory program could be mapped
out which would give that borrower a
new chance for life.

Maryland Casualty
Statement
T h e 36th annual statement of the
M aryland Casualty Company (B alti
more) issued recently, as of December
30th, 1933, shows resources in excess of
thirty-two million dollars, a surplus to
policyholders of $6,756,027 and no bills
payable. T h e statement gives effect to
recent stock subscription by the R F C to
the capital stock of the company.
T h e statement brings out the strong
financial position which the M aryland
Casualty Company now occupies. Cap
ital during the year was increased from
$1,000,000 to $2,500,000, and after re
serves were set up for premiums, taxes,
unadjusted claims, real estate deprecia
tion, plus a contingency reserve to pro
vide for shinkage in investments, the
surplus to policyholders exceeded six and
three-quarter million dollars.
In connection with the statement, F.
Highlands Burns, president, also pointed
out that there were no bills payable as
of the year-end, compared with an item
of $5,000,000 on that account in the
1932 statement.

Central Hestern Banker, M a y, 1934

During the year, M r. Burns added,
the company effected a reduction of $5,672,000 in losses, loss expenses and other
expenses. In its 36 years’ existence, T h e
M aryland Casualty Company has paid
claims aggregating more than $275,-

000, 000.

Banks Own Bonds
About half of the outstanding secur
ities of the United States government are
held by banks, reports Kenneth Still
man, economist, N ew Y ork City. In
surance and other trust funds account
for a large part of the balance, with the
result that only a comparatively small
part of the U. S. bonds and notes are
held by private individuals.
Pointing out that close to a third of
the total portfolios of the banks consist
of government securities, M r. Stillman
regards that condition in the national
banking situation as one of the chief ob
stacles of industry in obtaining capital.
T h e Federal government is now issuing
new securities at the rate of one billion
dollars a month, thus adding further
burdens to an already top-heavy finan
cial structure.

was entertained about this, especially as
to the deposit insurance payment, be
cause under certain contingencies it is
possible that the banks may get back part
of the money. It was held that this does
not affect the deductibility but if any
money is recovered, it is then to be re
ported as income. It should be noted
that the bank ruling applies only to
payments actually made, as distinguished
from additional amounts to which the
banks are subject to call.”

M oney in a Nutshell
Suppose you own a thousand houses
you wish to sell. Suppose that the stand
ard of value in your locality is wheat—
and that you will trade a house for 1000
bushels of it.
T hen suppose that there are a thou
sand persons who wish your houses—
but only a hundred of them have any
wheat. Y o u ’ll sell a hundred houses,
have nine hundred left on your hands—
and nine hundred people who would like
to buy them have to go without, because
they lack the accepted medium of ex
change.

Finally, suppose that it is discovered
that these nine hundred people possess
quantities of barley. This barley is like
wise given a value, in relation to the
value of wheat, and the result is that
you sell your houses and people obtain
lodging.
There is the money problem in a nut
shell. One reason why international
trade is languishing is that millions of
people who would like to buy from other
countries are unable to because they lack
the present medium of exchange— gold.
T hey live in silver standard countries—
and the present low price of silver, as
related to gold, has cut their purchasing
power to a fraction of former levels.
T h e move to remonetize silver, con
sequently, is simply a move to put buy
ing power into hands which now lack it
— and thus send new blood through the
slugggish veins of world commerce.

Silver Question
Important
T h e enthusiasm that followed the es
tablishing of silver’s value at 64 cents

“ Under the present competition of the
Federal government for capital, the door
to industrial financing is being closed.
Unless there is a drastic turn-about in
policy, industry will be driven to govern
mental financing.
Undoubtedly when
that condition comes, and it is fast ap
proaching, there w ill be regimentation
and socialization of industry.”

Tax Rulings

Meeting Place of Minds —

T w o important income tax rulings
tied up with the new deal have been
announced by the Bureau of Internal
Revenue, according to J. S. Seidman,
tax expert, of Seidman & Seidman, cer
tified public accountants. Both rulings
are favorable to the taxpayer. One holds
that expenses incurred in connection
with the initiating and approving of
codes under N R A are deductible. T h e
other permits banks to deduct payments
made into the temporary Federal deposit
insurance fund created under the Bank
ing A ct of 1933.

m ade; the bell rings; the talk begins. And this happens

“ These rulings,” M r. Seidman ex
plained, “ definitely establish the pay
ments as ordinary and necessary expenses
rather than capital items. Some doubt

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Federal Reserve Bank of St. Louis

the connection is

nearly sixty million times every twenty-four hours,
over Bell System wires. "I understand,” ’ I agree,”
"O kay,” or however else they phrase it, mind meets
mind by telephone—and often that meeting is priceless.

Bell Telephone System

Central Western Banker, M a y, 1934

an ounce has suffered considerable abate
ment. R eason: T h e value of any money
metal can be considered only in its rela
tion to the value of gold— and, with
gold at around $35.00 the value of sil
ver is actually less than it used to be, in
spite of the higher fixed price.
M any economists believe that inter
national recovery w ill be delayed until
gold and silver are related— so that when
gold rises and falls, silver follows it.
And it is a certainty that a genuine sil
ver revival would mean much to the
United States— in providing jobs, pur
chasing power, and industrial and social
opportunity.

THE GROUP M EETIN GS
(Continued from Page 4)

that Group 2 of the Nebraska Bankers
Association heartily endorse and aid in
every manner possible the form ing and
maintenance o f a statewide law enforce
ment system of highly trained men im
mune to the infection of political influ
ence and equipped with the latest ma
chinery to enable them to keep abreast
of the underworld.”
A t the conclusion of the Group T w o
meeting, the follow ing officers were elect
ed for the coming year: President, M .
M . T aylor, vice-president, Central N a

tional Bank of C olum bus; vice-president,
L. R. Coufal, president, Howells State
Bank of H o w e ll; and secretary-treasur
er, V . E. Dolpher, cashier of the First
National Bank of David City.
E. E. Placek, president of the N e
braska Bankers Association, presided as
toastmaster at the Fremont banquet, hav
ing earlier in the day attended the meet
ing of Group Three at N orfolk, which
was likewise held on A rbor Day.
McDermott Banquet Speaker

Bankers and their wives, in attendance
at the Fremont banquet, had a real treat
in listening to an outstanding address
on “ M oney and Inflation,” by J. F. M c
Dermott, vice president of the First N a
tional Bank of Omaha.
M r. M cD erm ott, who has delivered
this address before numerous civic clubs
and trade associations throughout the
M iddle W est, is an excellent speaker,
and both through his legal and banking
background has evolved a discussion on
the subject of money that is a truly bril
liant address.
M r. M cD erm ott, tracing the history
of money through past centuries, says
that money or a medium of exchange
must be elastic. W hen there is a large
volume of business to be transacted there

The YALE
Delayed Control
Timelock
H e a r in g U n d e r w r ite r s
I n s p e c tio n L a b e l

IS N E E D E D IN E V E R Y B A N K
LAR G E OR SM A L L

Sold By . . .

F. E. DAVENPORT & COMPANY
Official Experts for Nebraska Bankers Assn.
OMAHA, NEBRASKA

C entral T y p ew riter E x c h a n g e , Inc.
(EST. 1903)

N EW AND REBUILT TYPEW R ITER S, ADDING MACHINES, CHECK
W RITERS — FULLY GUARANTEED.
REBUILT MIMEOGRAPHS, STENCILS AND INKS
LOWEST PRICES

ALLEN-WALES
1820 Farnam St.

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Federal Reserve Bank of St. Louis

THE EINEST “ H EA V Y DUTY”
ADDING MACHINE MADE

Omaha, Nebraska

should be a large volume of money. Con
versely when business is quiet there
should be less money. M oney, he said,
must have the power to complete the
exchange of commodities or services.
He pointed out that gold is a natural
selection. A fter the primitive had experi
mented with various media, such as tin,
wampum, tobacco and other things, gold
has become the universal money. It is
precious and rare and holds its value. He
pointed out, however, that silver has
been the universal money among the
plain peoples of the world since gold is
too valuable for them to use.
M r. M cD erm ott said that if he had
the power to do so he would recall all
paper money, except Federal Reserve
notes, such notes he declared have elas
ticity and a 40 per cent gold reserve.
There are only three ways to inflate,
he pointed out, through gold, silver or
paper. T h e present administration is em
ploying the method of thinning out our
gold. In his opinion silver inflation would
be of assistance only in trading with the
Orient, since the Orient is silver terri
tory.
In closing his brilliant address, M r.
M cD erm ott delivered a eulogy on “ T he
Economics of the W est,” which painted
a glowing picture of opportunity in the
M iddle W est.
An attentive audience gave him a
splendid ovation at its conclusion.

Group Three Meeting
^ ^ B O L IT IO N

of the present Postal

Savings System and organization
and maintenance of a statewide police
system to quell bank banditry, and to de
feat the underworld, were the outstand
ing parts of the resolutions passed by
members of Group T hree of the Nebras
ka Bankers Association at their annual
convention on A rbor Day at Norfolk.
Ellsworth M oser, of Omaha, vice
president of the United States National
Bank, in his address, said that the best
investment any bank can make is in his
own community, through local loans
which the banker knows and can watch.
Group T hree bankers enjoyed a splen
did banquet at N orfolk, at which A . G .
Sam, president of the Live Stock Nation
al Bank of Sioux City, and chairman of
the Board of the Security State Bank of
Norfolk, presided as toastmaster.
Yale B. Huffman, treasurer of the
Production Credit Corporation, was a
N orfolk speaker.

Central Western Banker, M a y , 1934

INSURANCE ;

Us Application to the H anking

Over-Insurance—
A Farm Fire Menace
V E R -IN S U R A N C E is an amount
of insurance, on any property, in
excess of the actual replacement
value, less depreciation and obsolescence,
as applied to the terms of the policy. By
reference to the terms of the policy con
sideration is taken as to whether that
particular company insures for full
value, three-quarters value, etc.

By WAYNE HUDSON

Usual Causes of Over-Insurance

Over-selling on the part of the agent
writing the business, for the purpose of
enlarging his commissions. In such a
case the fault rests, not with the insured,
but with the company for their lax meth
ods instructing their agents in how to
determine the true insurable value. U n
less such a company changes its course
o f instruction they are routed to sure
failure.
Unwarranted, and usually sentimen
tal, value of his property is in the mind of
the insured. T h e fact that the building
was constructed of timber cut and pre
pared on his grandfather’s farm, perhaps
a quarter of an inch thicker or the boards
a few inches wider, can have no consid
eration in determining the true insura
ble value.
Unwillingness of the insured to allow
sufficient for depreciation and obsoles
cence. T h e average farmer, by virtue of
his profession, travels little and to him
his buildings represent the same value as
when originally built and the deprecia
tion in painting and usual wear and tear
is so gradual as to be unnoticed by him.
T o a stranger, coming to the farm for
the first time, this constant depreciation
is immediately noticeable and must be
accounted for in determining the amount
of insurance to cover.
Obsolescence is perhaps the greatest
cause of over-insurance. Years ago our
forefathers built large and pretentious

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Federal Reserve Bank of St. Louis

Sheridan, Michigan

Th ree of the usual causes
of over-insurance are
1.

Over-selling on the part
of the agent.

2. Unwarranted value of his
property in the mind of
the assured.
3. Unwillingness of the as
sured to allow sufficient
for depreciation and ob
solescence.

homes. Lumber was cheap and labor was
plentiful. T o add three or four extra
bedrooms, to accommodate an unusual
number at Christmastime or other holi
day seasons was simply a matter of cut
ting and preparing a few extra trees
that grew plentifully on the virgin farm.
T oday conditions have changed. Pres
ent modes of transportation spreads out
the holiday season and a few come to
visit most every Sunday. Those extra
rooms have been used for years as store
rooms or vacated entirely. In that day
no consideration was given to modern
heating and all that was necessary to
heat these added rooms was to set up
another stove and cut a few more cords
of wood. T here is no question but that
if such a dwelling was built today that

the construction cost would be an enor
mous figure.
However, it must also
be remembered, that should such a buildmg burn, a home would be reconstructed
on modern principles. T1 hose extra rooms
would be left off, a furnace would be in
stalled to heat the entire structure, mod
ern plumbing with bath and other con
veniences would be a part of the new
home and in general there would be no
resemblance whatever to the old and
beautiful home. F or these reasons the
present requirements of the family for
a home large enough to accommodate
them in this modern day must be con
sidered in determining the insurable
value and not the dwelling that is now
on the farm.
Never should the buildings on any
farm be insured for more than from six
ty to seventy per cent of the present sale
value of that farm.
This fact brings
about an enormous amount of over-in
surance in this present day.
D uring
prosperous times many farmers built
homes costing large amounts on small
faims, of comparatively small value. T o
produce on that farm sufficient revenue
to maintain such a dwelling is impossi
ble and hence the actual value of that
dwelling must be depreciated according
ly. In other words— a farm, with a sale
value of $5,000, cannot support build
ings with a value in excess of $3,500,
regardless of the fact that perhaps the
reconstruction cost of the dwelling alone
might be this amount.
Five year old Jane, says a writer in
Parents M agazine’, came home from
Sunday school full of question's. “ Is it
true, mother,” she asked, “ that men are
made from dust.” Receiving an affirm
ative answer, she replied, “ W ell, there
will certainly be a man born under the
spare room bed, before long.”

Central Western Bunker, M a y, 1934

Extracting
Silver and Profit
From Lead

# ii
....I'

molten metal spouts into
huge molds like water in the largest
refinery for softening and de-silverizing lead in the United States— one of
Omaha’s major industries. An impor
tant unit in the American Smelting and
Refining Company’s far-flung system
of plants, the capacity of its furnaces
and kettles is 1 9 2 ,0 0 0 tons per year,
one-fourth of the country’s total.
The aim and effort of this bank for
more than three-quarters of a century
have been to aid in the development
of Omaha’s trade and industry, and to
promote the business and agriculture
of the wide region from which the
city draw s its stren g th . More than
ever before, we are equipped today to
further their p ro g re ss — and yours.

a ZZLING

■

U n it e d States National Bank

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Federal Reserve Bank of St. Louis

O M A H A , N E B R A SK A
“NEBRASKA’S OLDEST BA N K ”
Affiliated with NORTHWEST BANCORPORATION

Central Western Banker, M a y , 1934

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W I L L IA M B . H U G H E S , S e cre ta ry
N e b r a s k a B a n k e r s A s s o c ia tio n

E . E . P L iA C E I v , P r e s i d e n t
N e b r a s k a B a n k e r s A s s o c ia t io n

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Found Dead
Oscar Dalton, 66, president of the
Bank of Liberty, was found dead from
a heart attack in the bathroom of his
home. H e had been prominent for years
in affairs of the town. Besides his w i
dow, two sons survive.
A daughter and two grandchildren
were killed in a cyclone south of Liberty
12 years ago.

Bank Open
W ith the opening of the Platte V a l
ley bank here, North Bend is being
served by a banking institution again
for the first time in a year.
T h e bank, which was moved from
M orse Bluff, is the same organization
and under the same officers as the bank
of M orse Bluff, a member of the state
banking system. It w ill serve the people
of both communities.

Named Inspector
Henry Sass of Chaleo was recently
appointed field inspector of the Produc
tion Credit bank located in the E x
change Building in South Omaha. His
territory includes the counties of Sarpy,
Douglas, Saunders and Cass, and his
duties consist largely in inspecting prop
erties offered as collateral for loans.
Loans are made on crops, feeds and seeds
and also live stock feeder loans. These
loans are made up to 75 per cent of the
value of the security offered, run six
months and draw interest at 5 jA Per
cent.

Rigid Banking Hours
Officials of the Scottsbluff National
bank announced that in the future the
banking hour schedule which was adopt
ed some time ago will be rigidly en
forced. T h e bank will be open to pa
trons at 9 o ’clock in the morning and

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Federal Reserve Bank of St. Louis

the doors will be closed promptly at 2
o ’clock in the afternoon. In the past it
has been customary to let some persons
in the bank before 9 o’clock when ur
gent business needed attention, and to
allow others to go in after 2 o ’clock.
T his practice, however, w ill not be fo l
lowed hereafter.
T h e new ruling at the bank officials
state, has been taken because of the in
creasing number of bank robberies. T hey
also state that many of the robberies
have been pulled just before the banks
have opened in the morning and just
after they are closed in the afternoon.

Receives License
Officers of the First National bank,
Utica, have received their license and
final notice from W ashington to open the
bank.
T h e new board of directors has been
elected and L. Lull will be in charge.
"Die new board of directors a re: Carl
Bereuter, H . W . Busch, John P. H an
son, W m . Langenheim, L. R. Rull, Jake
Severin, T o m W ake, and A . J. W hite.

Prospects Good
Byron
Dunn,
prominent Lincoln
banker, believes western Nebraska is one
of the most fortunate sections of the
country today. M r. Dunn, upon return
ing from a tour of the panhandle, said
money appeared to be freer and that
general business was better than any
other section he visited. H e reported a
better feeling among farmers and busi
ness men and said crop conditions, so
far as he could observe, were excellent.

Named Assistant
E. C. Koniceck has been named first
assistant to Leo E. M anion, a vice pres
ident of the Omaha Federal Land bank,
to succeed Henry C. Hall, resigned.

M r. Koniceck is a native Nebraskan.
For a number of years he was connected
with the farm mortgage department of
the First Trust Joint Stock Land Bank
of Chicago. H e came to the Omaha Fed
eral Land bank on September 16, 1933.
A t one time he was engaged in banking
in Doon, Iowa.

New State Bank
T h e Bank of Burwell, a new state
bank organized with a capital stock of
$25,000 and a surplus of $5,000, has
been chartered by Superintendent Luikart of the state banking department and
is now in operation. It takes the place
of two closed banks and is the only bank
there. T h e incorporators were Ralph L.
W alker, O . W . Johnson, H . R. Brown,
F. E. DeLashmutt, L . H . Johnson, F.
W . Manasil, E. E. T roxell.

Opens in Broken Bow
T he Broken B ow Production Credit
association opened for business recently,
headquarters being in the east rooms of
the first floor of the Telephone build
ing. C. G . Fink, secretary of the asso
ciation, is in charge of the office, and is
assisted by M iss Iva M ae Hanna as
bookkeeper and stenographer. T h e ap
pointment as inspectors of Ray R. Ivosina of O rd, R. E. Brega of Callaway
and Lawrence M anning of M erna has
been approved by the Federal Intermedi
ate Credit bank and the Production
Credit corporation of Omaha.

McDermott Talks
Continuing their program of addresses
on monetary subjects, members of the
M cC ook Chamber of Commerce at their
luncheon recently, heard J. F. M cD e r
mott, vice president of the First N a
tional bank of Omaha, on this subject.
M r. M cD erm ott’s address covered in
a brief but concise manner the history

Central Western Banker, M a y , 1934

of money from the beginning of trade,
down to the present day. H e explained
the manner of exchange of goods and how
changing conditions made necessary a
medium of exchange or to complete the
exchange.
But all of these methods
proved failures until gold and silver
were tried and have since proven the
only mediums that have stood the tests
of t i m e . ____________________

Becomes National
T he Security State bank, of Supe
rior, has been converted into a national
bank and w ill hereafter operate as the
Security National bank of Superior. T h e
stockholders, directors and officers re
main the same.

New Bank
T h e State Bank of Decatur sold its
bank building recently to H . C. Larson,
who represents a group of local capital
with plans for a new state bank. It is
understood that the capital has been sub
scribed and a charter w ill be issued as
a matter of routine in a comparatively
short time. A t about the same time the
First National bank expects to complete
arrangements by which they w ill pay
out their depositors in full. Oscar Lang
will be president and H . C. Larson,
cashier.

Unrestricted
T h e Petersburg State bank that has
been operating on a restricted basis since

last M arch,
Recently it
unrestricted
der the new

is now a going concern.
opened for business on an
basis and with deposits un
bank guarantee law.

Opens in Alliance

Elected to Board
W . Dale Clark, president of
Omaha National Bank, last month
elected to the board of directors of
Chicago & Northwestern Railway

the
was
the
for

Recently the Production Credit bank
opened its doors in Alliance with a cap
ital of $250,000 which is to be loaned
to farmers and stockmen that are able
to furnish reasonable security and the
scope of territory of this bank will be
operative in ten counties.
Those who receive a loan through this
institution become stockholders in the
P C A bank to the extent of five per cent
of their loan.
Ray Tierney o f
charge of the bank
president and M rs.
is vice president of

Chadron is in active
and Bob Graham is
E. Davis of Hyannis
the concern.

Merge Assets
T h e Adams County bank, a consoli
dation o f the Prosser State bank and the
Juniata State bank, opened for business
recently at Kenesaw.
Charles K. Hart, formerly of the
Prosser bank, is president of the new in
stitution; H ow ard G . Pratt, president
of the State Bank of Hastings, is the
vice president; and S. H . Itzen, former
ly of the Juniata bank, the cashier.

W . D ale C lark
a three year term. M r. Clark fills the
position on the board formerly held by
W alter W . Head.
M r. Head, past president of the
American Bankers Association, was
president of the Omaha National bank
preceding M r. Clark.

Unrestricted
T h e State Bank of Jansen has re
opened on an unrestricted basis. T he
institution is capitalized for $20,000.
J. M . Nider is president and H . T . Fast
cashier.

Named Trustee

We Have Ample Funds
To finance such feeder business as
as may be in excess of your local
ability to handle.

T h e First National bank of Omaha
was named trustee of the Loup river
public power district, generally known
as the Columbus project.
Charles B.
Fricke is president, and C. C. Sheldon,
treasurer, of the district. Both men are
life-long residents of Columbus. T h e es
timated cost of the project is approxi
mately seven million dollars.

Celebrates

LIVE STOCK NATIONAL BANK
O M A H A
WE

ARE

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Federal Reserve Bank of St. Louis

THE

MARKET

FOR

FEEDER

LOANS

M ason City has been without a bank
for some years past. Recently the Farm
ers State bank of Berwyn was moved to
M ason City and the town put on a big
celebration the follow ing day in appre
ciation of again having a home bank. A

Central Western Banker, M a y , 1934

free lunch was served, the Beechville
bank did themselves proud in further
spiriting up the large turnout, the w o
man’s club presented a program at the
opera house, and the day’s jubilee was
capped by a big dance at night.

Business Good
A heavy increase in business was re
ported by officials of the National Bank
of Commerce, Lincoln, at a recent meet
ing of the directors. “ T h e first three
months of 1934 were the best of any
similar period in the last five years,” M .
W eil, president, said.
By transferring a part of the earnings
and undivided profits, the capital stock
of the bank was increased to $300,000,
and the surplus from $100,000 to $200,000.
T h e undivided profits and re
serves are $125,000.

In the case of a county judge, who
had trust funds on deposit in a failed
bank, the court holds that the judge is
responsible for the lost money. T h e fact
that he exercised care in the selection
of a depository for the trust funds does
not relieve him from responsibility.
In the case of a school district in Hall
county, where the bank was approved as
a depository, the court holds that the
district stands with the general creditors.
In a case from Dawes county, where
the money was deposited before the bank
was approved as a depository, the court
holds that the deposit was a trust, and
that the district is entitled to recover as
such.
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Colorado, Kansas, N ew M exico and
Oklahoma has been announced by the
W ichita Bank for Cooperatives.
T he
rate of interest on facility loans to farm
ers’ marketing and purchasing coopera
tives remains unchanged at 4J4 per cent.
Merchandising, or working capital,
loans are those made to farmers’ coop
erative associations to aid them in more
efficiently marketing their products. Re
payment usually is required at the end
of the marketing season.

Banker Dies
Funeral services were held in Fowler
recently for A . W addington, president
of the First National bank. M r. W a d
dington lived in Colorado Springs many
years. H e is survived by his wife, two
daughters and a son.

W ith Land Bank
New Bank Directory
Superintendent Luikart of the state
banking department has issued a new
state bank directory containing statistical
material up to June, 1933. It has been
several years since such a volume was
printed by the department. It shows the
condition of 415 commercial and savings
banks at the close of business June 30,
1933, also the condition at that date of
83 building and loan associations, 16
trust companies, 2 installment invest
ment companies and 36 cooperative cred
it associations. It contains a list of 124
banks which failed between June 30,
1931, to June 30, 1933. Several mer
gers, 17 reorganizations of banks and
3 new chartered banks are listed. A
consolidated statement of the condition
o f state banks from 1890 to June 30,
1933, is included.

Court Decisions
A number of interesting decisions re
lating to banks, public officials and pri
vate citizens were handed down by the
Nebraska supreme court.
One case involved a certificate of de
posit. It was held by a widow, whose
heirs were apprised of its existence by
the receiver for the bank. Search was
made, and the certificate, then eight
years old, was found.
It was not admitted as a preferred
claim against the defunct bank, and a
decision by Judge Day holds that the
heirs lose the money. T h e bank, says the
court, had no fiduciary responsibility to
the holder of the certificate, which was
negotiable and might change ownership
many times.

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Federal Reserve Bank of St. Louis

H . A . Lennartz, Jr., of Sterling, has
accepted a position as associate counsel
of the Federal Land bank at W ichita,
Kansas.
T h e position is regarded as a very
fine one. M r. Lennartz, Jr., has been
practicing law in Sterling. H e left for
W ichita wishing to find out whether
the position was permanent and other
details before accepting.
H e is a graduate of the University of
Colorado law school.

Lower Rates
Reduction in its rate of interest from
4 to 3 j4 per cent on merchandising loans
to farmers’ cooperative associations in

Plan Approved
T h e treasury department has ap
proved the reorganization plan for the
First National bank of La Junta, Colo.

Service Charge
T he Bank of Baca County of T w o
Buttes, Colorado, has joined the other
banks in the county by giving notice to
its depositors that commencing last
month, a charge of 50 cents per month
will be charged against accounts having
an average balance of less than $50 for
the month, but not applicable on inac
tive accounts. A ll of the other banks in
the county had previously installed the
system.

Offering to Banks of Nebraska
“ Hie Kind of Service you’ll Like”

o ntinental

atio nal

LINCOLN, N E B R A SK A

ank

Central Western Banker, M a y, 1934

Big Gains
Clearings of the five Pueblo banks in
M arch were better than 23 per cent
above those for the corresponding month
in 1933, the First National bank report
ed recently.
T h e comparative figures show the
clearings for M arch were $1,973,070.13
against only $1,591,918.64 for M arch,
1933.
An even greater increase, figured from
a percentage angle, was shown over the
corresponding week in 1933, when the
clearings were $307,355.69.

For the first three months this year,
the clearings were $5,586,223.22, just
slightly under the clearings for January
1 to M arch 31, 1933.

Code Effective
Representatives of banks in Pitkin,
M esa, M ontrose, Delta, Garfield, Rio
Blanco and Eagle counties met in Grand
Junction recently and agreed upon a
code of charges to be collected for serv
ices rendered by banks.
T h e new code was effective last
month, and a charge of five cents will
be made for handling checks drawn on
outside banks. T h e bank w ill also charge
a minimum of 50 cents for accounts of
less than $50 average daily balance.
This charge w ill permit the depositor
to write five checks without charge.
T hree cents w ill be charged for each
check in excess of this number.
Depositors whose average monthly
balance is in excess of $50 w ill be per
mitted to write one free check for each
$10 average balance. In other words if
the average balance of the depositor is
$60 for the month, he w ill be allowed
to write six checks without service
charge.

Returns

50 CEN TRA L PARK SOUTH

NEW YORK
Direction: S. GREGORY TAYLOR

I nteresting A l w a y s !

J. M . B. Petrikin, president of the
First National bank, returned to Gree
ley recently. M r. Petrikin took a 28-day
cruise to the W est Indies from N ew
York. H e visited Bermuda, Porto Rico,
Barbadoes, Martinique, Trinidad, Cara
cas, Haiti and Nassau, and went
through the Panama canal.

Diverting... entertaining... famous
people from all over the world
make it their New York home . . .
overlooking Central Park's pano
rama ... ideally convenient to the
fashionable shops and theatres.
Rates: Single, $3.50-$5; Double,
$5-7; Suites from $8.

Because of domestic trouble in Cuba
his vessel was not allowed to stop there.
A t Porto Rico the banker noted that
there is a definite feeling toward the
Ehiited States because of the fight there
to restrict imports in favor of domestic
production.

THE NEW CONTINENTAL GRILL
for dinner and supper dancing
to LEON B ELA SCO 'S alluring
rhythms . . . entertainment . . .
G a la Night Every Thursday.
•
Then there's Cocktail Hour in the
BACCHANTE BAR and in Amer
ica's only RUMPELMAYER, which
is open from breakfast thru thea
tre-buffet.

O . C. Samuel, for many years vice
president of the Commercial Savings
bank, Trinidad, which merged with the
First National last January, is now en
gaged as a special investigator for the
Federal Land bank of W ichita, Kansas,
in the ninth district, comprising the four
states of Colorado, Kansas, Oklahoma
and N ew M exico. H e is one of two
Colorado men to receive appointment in
the land bank service, the other being D .
E. Nickelson, banker of Canon City.

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Federal Reserve Bank of St. Louis

Special Investigator

Deposits Up
T h e first year of the new deal brought
a sharp stepup in Denver bank deposits.
Official figures covering deposits in the
six banks that are members of the D en
ver Clearinghouse association showed
that deposits of $136,660,533.64 were
on hand at the close of business M arch
5, 1934; the date the comptroller of the
currency chose for a condition state
ment. As of M arch 3, 1933, just before
the bank holiday, the same banks had
deposits of $118,578,548.49.

Service Charges
T h e follow ing schedule w ill be in ef
fect on and after April 1, 1934:
Checks on all Delta county banks
cashed for customers or accepted for de
posit at par.
Cashing for customers or receiving
for deposit checks on all banks outside of
Delta county, 5c per each $50.00 or
fraction thereof. M inim um charge, 5c
per item.
Checks cashed or deposited in excess
of $1,000.00, banks outside of Delta
county, minimum charge, $1.00.
N o charge for cashing C W A checks.
Checking A ccounts: N o basic charge.
Each depositor allowed to draw one
check for each $10.00 minimum balance
on deposit during the month without
charge. A ll checks charged to an account
during each month in excess of one for
each $10.00 minimum balance to cost
3c per check.
Colorado Bank & T rust Company,
Delta, Colo.
First National bank, Cedaridge, Colo.
First State bank, Hotchkiss, Colo.
C raw ford
State bank, Crawford,
Colo.
First National bank, Paonia, Colo.
T h e above schedule is uniform in sev
eral counties in W estern Colorado ex
cepting that some banks w ill make a 50c
charge on accounts under $50.00 while
others w ill have no basic charge and
will allow one check free for each $10.00
minimum balance.
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New Bank
An intensive campaign has been
launched to sell stock in a new commun
ity bank for Linn. T h e plan follow ed is
one suggested by the federal govern
ment, cooperating with the state bank
ing department.
T h e department has

Central Western Banker, M a y , 1934

suggested the name of “ T h e Linn State
bank.”
Under the plan approved the new
bank will be capitalized for $25,000,
with $1,500 surplus and $1,000 undi
vided profits. O f this amount the gov
ernment w ill furnish $15,000, leaving
12,500 to be raised by the new stock
holders. One hundred shares will be o f
fered for sale at $125 a share.

County Meeting
Representatives of all Rice county
hanks met at the Chandler National
hank in Lyons for their annual business
meeting and election of officers. There
were 29 present, including several spe
cially invited guests.
T h e election resulted as fo llo w s : E.
W . Farrell of Sterling was named pres
ident to succeed W illiam Volkland of
Bushton. Floyd Ross of Sterling became
vice president, succeeding M r. Farrell.
W . W . Chandler of Lyons was elected
secretary and treasurer to succeed A . W .
Volkmann. W illiam Volkland and John
W iggins of Geneseo were made the other
two members of the directorate.

Meet in Russell
T h e meeting of the Russell County
Bankers association held recently was
one of the most constructive meetings
held in a long while, being quite in con
trast to the meetings held a little over a
year ago when the banks were under the
national holiday.
Every bank in the
county was represented, and about 80
persons including the active officers and
employes and wives sat down to the
banquet.
A t the business meeting the follow ing
officers were elected for the remainder
of the year: Fred J. Smith of the Home
State bank, president; Eugene Ball, of
the Gorham State bank, vice president,
and James J. Thom an, of the RussellFa rmers State bank, was reelected sec
retary. E. A . Ford of the W a ld o State
bank, the retiring president, served dur
ing one of the most active times of the
association.

Group Seven Meets
Group sevent of the Bankers associa
tion met in St. John recently. M . M .
Read of the First State bank of Larned
is president and Leo Brown of the First
National bank of the same place is sec
retary. O cer 75 bankers were present
from the follow ing counties: Pawnee,
Barton, Pratt, Reno, Comanche, E d

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Federal Reserve Bank of St. Louis

wards, Kiowa, Rush, Rice, Ness, H odge
man and Stafford.
T h e N R A code for banks was dis
cussed. N o action was taken, although,
in a manner, it was approved.
Fred Bowman, secretary of the Kan
sas Bankers association, attended the
meetings and outlined some of the pro
posals for the code.

and Chas. Bennet, Undersheriff Roy
W yant, Sheriff J. E. Whiteside, the
county commissioners, O . L . Hays, Rex
Singleton and O tto A pollo and M r.
Clark, district manager of the Home
Telephone company.
W . C. Cantrall, vice president of the
association, was in charge of the evening
and the topic for discussion was “ Ban
ditry.”

Elected Vice President

Dies in Hutchinson

A t a meeting of the board of directors
of the M iam i County National bank,
Paola, W . H . Lyon was elected vice
president to succeed the late H . C.
Jones. M r. Lyon has been on the board
more than a quarter of a century. H e is
known the county over as a man of ex
ceptionally sound judgment and one who
is thoroughly familiar with M iam i coun
ty affairs. M orton D . Stevenson, assis
tant cashier, was elected to fill the va
cancy on the board caused by the death
of M r. Jones. Other officers and di
rectors are: C. N . Emery, chairman;
Frank W . Sponable, president; John
W . Sponable, vice president and trust
officer, and H . H . W hitaker, cashier.

Oscar S. W espe, 72, pioneer H utch
inson resident, president of the Central
State bank, and district manager of the
International Harvester company for 30
years prior to his retirement in 1929,
died recently at his home.
For many years M r. W espe was a
director of the Central State bank. H e
had been president for the past several
years.

County Meeting
T h e W ilson County Bankers associa
tion met recently at Fredonia. Thirtyfour were present and the additional
guests included: M ayor Jack Bogue of
Neodesha, M ayor Arthur Hollis and
the city commissioners, C. V . L a D ow

Change in Officers
T h e directors of the Bank of H orton
recently advanced B. B. Norris, who for
a number o f years had been cashier of
the bank, to the presidency. M r. N or
ris completed 36 years of service with
the bank on the day he became presi
dent. E. P. Trompeter, an employe
for 20 years and assistant cashier was
promoted to the cashiership. M rs. M in
nie Preston, an employe since 1925, was
made assistant cashier.
T h e Bank of Horton was established
M arch 15, 1887.

EVERY CITY HAS ONE
OUTSTANDING HOTEL
In O m a h a , it ’s . . .
HOTEL

FONTENELLE
The Fontenelle is Omaha’s welcome to
the world! Its comfort, courtesy, con
venience and

service

have

made

known everywhere as the home of real,
old - fashioned

Nebraska

hospitality.

Operated by E P P L E Y H O T E L S CO.

400
ROOMS

Central Western Banker, M a y, 1934
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F. J. Atwood Resigns
F. J. A tw ood, president of the First
National bank, Concordia, tendered his

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resignation

recently.

M r.

A tw ood ’s

resignation came on his 77th birthday
and after more than 50 years of service
as

the

head

the

bank

which

founded.
T h e board of directors accepted the
resignation and deferred the election of
a successor until the next meeting of the
board.

Hold Conference
A conference of Federal Land bank
representatives in W yom ing was held
in Casper recently with John Carmody
of Omaha, vice president and secretary.
Carmody met with 35 secretary-treas
urers of national farm loan associations
in W yom ing to discuss ways of speeding
up the closing of a large number of
farm loans granted in W yom ing.

Banks Apply

Consolidated
A fter 36 years of successful operation
the Reserve State bank of Reserve, Kan
sas, voted to merge with the M orrill &
Janes bank, moved recently to H iawa
tha.
Chester G . Jones, who for 14 years
has been cashier of the Reserve State
bank, will be cashier of the M orrill &
Janes bank.
A ll the present officers of the M o r
rill & Janes bank w ill continue with the
bank.

New in Lyons
C. Q . Chandler, well known W ichita
financier and philanthropist, and W . W .
Chandler, his son, have completed ar
rangements for the establishment and
operation of a well financed national
bank in Lyons. T h e bank will be known
as T he Chandler National bank.
W . W . Chandler, who is vice presi
dent and cashier of the new bank, has
completed arrangements for acquiring
the banking house and fixtures of the
closed Lyons National bank. T h e new
bank will open with a paid-in capital of
$50,000 and surplus of $10,000.

Six hundred banks in Kansas, Nebras
ka, Colorado and W yom ing have ap
plied for membership in the federal de
posit insurance corporation, it was an
nounced by G . F. Roetzel, in charge of
a branch office.
Roetzel said examination of the ap
plicants virtually had been completed.
T h e corporation provides insurance for
bank deposits up to $2,500.

Dividend
Savings account depositors in the de
funct Riverton State bank are to re
ceive a 15 per cent dividend, amounting
to approximately $7,500, it was an
nounced recently.
T h e payment was made April 15.

tingent upon congressional approval of
the pending legislation to aid the beef
and dairy industries.
Intended for one year, the program
can be continued for an additional year
at the discretion of the Secretary of A g
riculture. T h e plan is open to all dairy
men, with eligibility to be established
by base period delivery records or other
adequate sales figures. Supervision will
be by county production control associa
tions and local committees.
T h e plan is to have sufficient flexibil
ity to permit future expansion of produc
tion in step with any substantial recov
ery that may later develop in consumer
buying power.

THE BUSINESS OUTLOOK
(Continued from Page 3)

period just before the depression. T h e
statistical evidence shown this month
(A pril 16) indicates that there was no
serious overproduction of durable and
capital goods just before the depression,
but that serious shortages have devel
oped during the depression.
Durable
goods as distinguished from consump
tion goods are those made of the lasting
materials.
In the main they are not
bought at retail, and in large part they
are paid for by borrowed funds secured
from bond issues, mortgages, and in
stallment notes.
•
r J^H E a c c u m u l a t e d

RESTORING
PURCH ASING POW ER
OF D A IR Y FARM ER S
(Continued from Page 6)

we can support schedules of farm prices
in marketing agreements and licenses by
control of supply.
One or More Years

T h e plan is estimated to be a 165 mil
lion dollar program with a possible ex
tension to over 300 million dollars, con

shortage was four

months in 1915, and nearly 22
months in February, 1934. Despite tech
nocracy the fact is that no serious sur
passes o f durable and capital goods
were accumulating before the depression.
Present shortages are acute in durable
goods. Unemployment cannot be cured
by subsidizing consumer purchasing
power, but can be cured by reestablish
ing financing of durable goods produc
tion.

A U S T R A L A S IA

BANK OF N E W S O U T H W ALES
E S T A B L IS H E D

1817

( W it h w h ic h a re a m a lg a m a te d T H E W E S T E R N A U S T R A L I A N
a n d T H E A U S T R A L I A N B A N K O F C O M M E R C E L t d .)
P A I D -U P
C A l ’ I T A l .............................................................................................................. £ A
R E S E R V E F U N D ..................................................................................................................
R E S E R V E L I A B I L I T Y O F P R O P R I E T O R S ...............................................

BANK
8 .7 8 0 ,0 0 0
6 .1.1 0,0 00
8 .7 8 0 ,0 0 0

£ A 2 3 ,7 1 0 ,0 0 0

Aggregate Assets 30th September, 1933, £ 111,512,302
A G E N T S — F IR S T

N A T IO N A L

BANK. O M AnA, N EBRASKA

H E A D OFFICE, GEORGE ST., S Y N D E Y

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Federal Reserve Bank of St. Louis

GENERAL

M ANAGER, ALFRED

CHARLES

D A V ID S O N

LONDON OFFICE, 29 T H R E A D N E E D L E ST., E. C. 2

710 B r a n c h e s a m i A g e n c i e s in A i l A u s t r a l i a n S t a t e s , F e d e r a l T e r r i t o r y ,
N e w Z ea la n d , F iji, P a p u a , M a n d a ted T e r r it o r y o f N e w G u in ea and L o n d o n

A bove, Panoramic V iew

of the

S tockyards, S outh O m a h a , N ebraska

Se r v in g t h e O m a h a
TRADE TERRITORY
A tremendous factor in the growth and development
of the Omaha trade territory is the Omaha stockyards.
An investment representing millions of dollars, it
is the focal point of the vast livestock industry that
has contributed so heavily to the prosperity of the mid
dle west.
•

Likewise serving the great Omaha trade territory
is the CENTRAL WESTERN BANKER of Omaha, the
personal banking publication of bankers in Nebraska,
and adjacent territory.
The financial institutions of this area, represented
in the advertising columns of this publication regularly,
know the value and prestige of the CENTRAL WEST
ERN BANKER.
•

Consistent advertising in the CENTRAL
W ESTERN B A N K ER brings results.
Write today for rate card and complete
information.

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estern

OMAHA
410 ARTHUR BUILDING

B an ker

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Federal Reserve Bank of St. Louis

Full text of Central Western Banker : May 1934, Volume 29, No. 5

FRASER